Measure for Measure

“A laser-like focus on measuring impact”, is Ed Penhoet’s description of the philosophy of the Gordon and Betty Moore Foundation, which he ran from 2004 to 2007. In a keynote conversation with Matthew on June 25th, he rejected criticism that the foundation, established in 2000 by one of the founder’s of Intel, was too obsessed with measurement. This criticism has implicitly been accepted by his successor, Steve McCormick, however, who has relaxed some measurement requirements in order to take what Penhoet calls, with a smile, a slightly “fuzzier” approach.

In general, too much philanthropy is unfocused and doing things in which it is impossible to know what difference, if any, the giving is making, says Penhoet.

Penhoet also questioned the usefulness of the Center for Effective Philanthropy, an organisation we praise in the book as a leading philanthrocapitalism intermediary. The CEP’s best-known product, the grantee perception report, “doesn’t measure effective philanthropy”, he said, “it measures a foundation’s popularity with those it gives grants”. When the Gordon and Betty Moore Foundation went through the CEP process, it got a decidedly mixed report. But that is because “many of our grantees didn’t like us, because we asked them tough questions about the impact they were having and whether they were using our money to achieve our goals”.

Penhoet is the sort of foundation chief we like – a successful business man, the co-founder of biotech pioneer Chiron, who brings his business brain to philanthropy, being strategic, no-nonsense, having a realistic sense of what the foundation can achieve, and above all wanting to use giving to make a demonstrable difference.

As a fairly large foundation, with assets of $6 billion, the Gordon and Betty Moore Foundation has more ability than most to drive change. Even so, Penhoet and Gordon Moore, the philanthropist who stumped up the money, have focused on areas where they believed they could bring about meaningfully better outcomes. One area where Penhoet believes a difference was made was revitalising the relatively neglected academic field of marine micro-biology, another was improving ocean stocks of North Pacific salmon, another was raising the quality of nursing in the Bay Area (which Penhoet says had been among the worst in the country).

Yet there have also been failures, such as an attempt to reduce deforestation in the Amazon. The foundation knew the project was risky, but had not reckoned with the recent surge in demand for corn for ethanol production, which caused trees to be cut down for land to grow replacement soy for that lost due to greater corn production.

It will be interesting to see how the less laserlike, less measurement-obsessed Gordon and Betty Moore Foundation performs under its new leadership. We suspect its grantees may like it more, but we are not so sure its impact will be greater.

0 replies on “Measure for Measure”

I’m sorry Ed feels CEP’s Grantee Perception Report is more of a “popularity contest” than a tool to understand and improve a funder’s effectiveness. Luckily, most funders that have commissioned a grantee survey from CEP disagree. In a recent 3rd party assessment of how funders respond to the grantee feedback they receive, nearly all indicate making substantive changes that they believe will improve their performance.

And, why shouldn’t funders listen to their grantees and respond? Especially for focused funders working strategically in a field or a community, grant recipients are a funder’s chosen agents to change those fields or communities. Whether a funder is “purchasing” services or impact through grantees or working with them to achieve shared goals, some basic principles have to apply. If a funder isn’t clearly communicating its goals or strategies, how can a grantee be expected to work optimally to achieve them? If a funder is unresponsive or unapproachable when problems arise, how can a funder best position itself to offer help, ask tough questions, or celebrate successes? If grantees tell a funder that the funder hasn’t helped them improve the sustainability of their program (if that’s the funder’s goal), then it probably hasn’t.

And we know it’s possible to be focused, ambitious, and still receive strong grantee ratings because grantees tell us in their own words that it is. No grantee survey is definitive proof of effectiveness, but the constructive feedback provided through a confidential, comparative process, can make a real difference. Many funders have chosen to make the results of their Grantee Perception Reports public. You can read them here and judge for yourself:

The Gordon and Betty Moore Foundation is one of those funders that made an excerpt of their recent 2008 GPR results public on their website.

Since they’ve shared the results publicly, I can say that grantee ratings suggest that the Foundation has improved significantly since it first surveyed grantees in 2004. And grantees’ words and ratings paint a picture of a funder striving to create real impact through its focused efforts. But they also show a funder that has struggled to find a consistent focus, message, and the right amount of measurement that doesn’t overwhelm grantees but helps them and Moore do their work better. Moore’s efforts to change based in part on grantee feedback, described in the public letter discussing Moore’s latest GPR results, strike me as rooted in a desire to make more of an impact — not a desire to be well-liked.

— Kevin Bolduc, Vice President, CEP

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